By James Langton

(July 10 – 12:45 ET) – Stocks are sliding this morning in lacklustre trading. The TSE 300 is off 60 points at midday to 10,320 on volume of just 44 million shares. The volume, more akin to holiday trading, is marginally favouring sellers. Decliners are also outpacing advancers about 19:16.

Negative market reaction to the JDS Uniphase Corp. US$41 billion megamerger, announced this morning, is weighing heavily on markets. JDS is down about 10% in heavy trading as investors speculate that the firm is overpaying for supplier SDL Inc.

On that news the whole tech sector is lagging. Weakness is also evident in energy plays, as oil stocks slide. Steels and building materials are also weak. Mines and golds are the only areas of any real strength, although that is moderate.

Joining the tech slide are Nortel Networks, 724 Solutions, Research in Motion and Ballard Power. Oils are being led down by Renaissance Energy and Veritas. Hemosol is also notably weak.

On the upside the big movers are Exfo Electro-Optical, on speculation the JDS merger will soon lead to more buying in the optical sector. Mosaid is up strongly, as is ATS Automation Tooling. MDSI Mobile is bouncing off last week’s garrotting. Laidlaw is also a top trader on the upside, bouncing up 17¢ to 78¢.

Bombardier, CIBC and BCE are the top large caps trading higher.

In New York stocks are mixed. The Dow Jones industrial average is up 32 points to 10,668, after Dow component Alcoa beat analyst estimates, posting a 57% profit increase in the second quarter. The JDS deal is weighing on the NASDAQ composite though, where the firm accounts for about 4% of the index. It is down 11 points to 4,012 at midday. The S&P 500 is up just 2.4 points to 1,481.

The other big news in the U.S. is that Honeywell International Inc. will cut 6,000 jobs and face reduced profits this year and next.

On the CDNX stocks are weak, too. The index is down 19 points to 3,414 on light volume of 14.9 million shares. Techs and mines are weak, oils are down a touch. International Bravo is the hot trader, up 12.5% to 18¢ on 1 million shares.